Oversight is one of the most effective benefit plan management tools available to employers who self-fund their programs. Improved medical claim auditing has vastly improved the accuracy of reviews and reporting. It provides an unprecedented level of oversight for plan sponsors needing to double-check their claim administrator's performance. Even when contracts have performance guarantees and promises of self-auditing, a keeping-them-honest review from an unbiased independent auditor is helpful. Finding systemic errors that, when corrected, prevent multiple mistakes always helps.

One of the reasons it's crucial to audit medical and pharmacy claims is the dollars involved. The numbers can be huge depending on the plan's enrollment, and even small details have significant consequences. When an audit report details every opportunity to achieve cost savings (or recover overpayments made in error), in-house managers at a plan sponsor have a leg up. Paying claims is necessarily complex, with many plan rules and unique attributes. When each one is reviewed for dozens of data points, it roots our errors to a minute level of detail and accuracy.

Technological advances continue to drive improvement in claim auditing. The amount of human participation in an audit decreases continuously as software improves. It's one of the reasons to use a specialist auditor working only in the claims review field. People who are on the job every day with a high degree of specialization can quickly achieve better results than those who perform the same task only infrequently. Larger generalist auditors also have many allegiances, and their advocacy may not be as strong as independent firms with no other loyalties. Talk to other plan sponsors about who they use.

The primary benefit of claim auditing is medical and medicine cost containment, but member service also benefits. Each plan should treat all members equally, and when claims are paid accurately, it's a way to make it happen. Inaccurate payments that may benefit one member at the expense of another one aren't the way a plan should operate. Auditing to improve accuracy has many advantages and is budget neutral or better. Most audits today find much more in savings than their price. It's one of the reasons plans have begun auditing as a management function rather than merely regulatory compliance.